Nashville DADU - Detached Accessory Dwelling Units

What is a DADU

A Detached Accessory Dwelling Unit (DADU) is a small, standalone home that includes a sleeping area, bathroom, kitchen, and living space, typically situated on the same lot as a single-family home. These units are usually newly constructed, though some homeowners choose to convert existing structures, like garages or outbuildings, into a livable space. DADUs typically cover up to 800 square feet and are positioned at a suitable distance from the main house and neighboring properties to ensure privacy. In cities like Nashville, DADUs are gaining popularity as versatile living spaces for family members or as a potential source of rental income. Often referred to as backyard cottages, these smaller home units offer a charming and practical solution for short-term rentals or as separate in-law quarters.

Is Building a DADU a Good Investment?

The answer to whether a DADU is a good investment depends largely on your reasons for building one.

If your goal is to provide a comfortable living space for aging parents without the ongoing expense of a retirement home, a DADU could be an excellent option. With the average cost of retirement homes reaching $45,000 per year, financing a DADU could be a more affordable and financially beneficial alternative, allowing you to retain the investment in your property.

Alternatively, you might consider building a DADU as a future residence for yourself, planning to pass your main home on to a family member.

For those looking to increase their property value and diversify their income streams, a DADU can be a smart investment. As long as your local zoning regulations permit it, you can add a second, smaller dwelling on your property, which could be rented out as an apartment or used as a home office.

Considerations Before Building a DADU

Before moving forward with building a DADU, it’s important to consider your budget and local zoning regulations. If zoning laws in your area restrict the size or use of DADUs in a way that doesn’t align with your plans, it may not be the right choice. Additionally, if the cost of building a DADU is beyond your budget or if you don’t have a clear plan for generating income from it, it might not be a worthwhile investment.